PETITIONER:
SOUTHERN ROADWAYS PRIVATE LTD.
Vs.
RESPONDENT:
UNION OF INDIA AND ANOTHER
DATE OF JUDGMENT:
16/01/1962
BENCH:
ACT:
Income Tax-Development Rebate-Disallowance on
office appliances and transport vehicles If
discriminatory-Income-tax Act, 1922 (11 of 1922)
as amended by the Taxation Laws (Amendment) Act
(28 of 1960, s. 10(2) (vi-b) second proviso.
HEADNOTE:
The assessee company owned a fleet of buses
and carried on the business of transport. The
income-tax officer disallowed development rebate
on the transport vehicles owned by the company as
provided by the second proviso to s. 10(2) (vi-b)
of the Income-tax Act. The company challenged the
section on the ground that the said proviso
offends Art. 14 in that it discriminates between
machinery which is office appliances or road
transport vehicles and other kinds of machinery.
^
Held, that there is nothing in the
Constitution which prevents the Legislature from
choosing the objects of taxation from amongst
various classes of machinery for purpose of giving
development rebate.
JUDGMENT:
ORIGINAL JURISDICTION: Petition No. 143 of
1961.
Petition under Art. 32 of the Constitution of
India for the enforcement of Fundamental rights.
S. Swaminathan and R. Gopalakrishnan, for the
petitioner.
K. N. Rajagopala Sastri and P. D. Menon, for
the respondents.
595
1962. January 16. The Judgment of the Court
was delivered by
KAPUR,J.-This is a petition by the assessee
under Art. 32 of the Constitution challenging the
constitutionality of the second proviso to s.
10(2) (vi-b) of Income tax Act introduced by The
Taxation Laws (Amendment) Act (28 of 1960). The
relevant section with the proviso is as follows:-
S. 10(1) “The tax shall be payable by an
assessee under the head “Profits and gains of
business, profession or vocation” in respect
of the profits or gains of any business,
profession or vocation carried on by him.
(2) Such profits or gains shall be
computed after making the following
allowances, namely:
………………………………………
……….
………………………………………
……….
(vi-b) in respect of machinery or plant
being new, which has been installed after the
31st day of March, 1954, and which is wholly
used for the purposes of the business carried
on by the assessee, a sum by way of
development rebate in respect of the year of
installation equivalent to twenty-five per
cent of the actual cost of such machinery or
plant to the assessee :
Provided that no allowance under this
clause shall be made unless the particulars
prescribed for the purpose of clause (vi)
have been furnished by the assessee in
respect of such machinery or plant;
Provided further that no allowance under
this clause shall be made in respect of any
machinery or plant which consist of office
appliances or road transport vehicles.”
The petitioner is a limited company with its
registered office at Madurai in the State of
Madras
596
which owns a fleet of buses and lorries and
carries on the business of transport In respect of
assessment year 1960-61 it claimed a development
rebate on all its plants and machinery including
business. The Income tax Officer disallowed the
claim of rebate on transport vehicles under the
proviso above quoted and computed the tax payable
without such rebate. It was contended on behalf of
the petitioner that the proviso offends Art. 14 in
that it discriminates between machinery which is
office appliance or road transport vehicles and
other kind of machinery. It is difficult to accept
such a contention because there is nothing in the
Constitution which prevents the legislature from
choosing the object of taxation from amongst
various classes of machinery for the purpose of
giving development rebate. The Constitution does
not prohibit any such classification which has
been made in the pressnt case.
The petition is wholly without merit and is
therefore dismissed and the rule is discharged.
The petitioner will pay the costs of the
respondent.
Petition dismissed.